Insurance Sector Grows 22% in Premiums Issued Despite Inflation and Macroeconomic Conditions: Fasecolda Report.

Although inflation and macroeconomic conditions are not the most appropriate at this time for the insurance sector, in the last report that the Federation of Colombian Insurers (Fasecolda) presented, it made the balance of the union and They assured that for the first quarter they issued premiums for a total of $12.1 trillion, which meant a growth of 22% compared to the same period in 2022.

This data was driven by general insurance, among which are auto and engineering and Soat, a segment in which they issued $6 trillion and had a growth of 21% this quarter.

The segment with the lowest growth was life, Fasecolda assured that for this group it issued $2.6 trillion and had a growth of 13%. This behavior is explained by the high inflation that for March was at 13.34%, the highest figure so far.

“With the economic crisis and when people have a cut budget, unfortunately they think that insurance can be an expensive expense and since it is an expensive expense, they take it out of their budget. and the companies that do have some budget for insurance have realized that the market in general is hard, that is to say that the rates are going up”, explained Marta Pava, president of SBS Seguros.

Despite this, the Fasecolda report shows that the premiums issued have been growing since March 2018, and by March 2022 they achieved a real variation of 11.2%.

By lines of business, written premiums were marked out in the first quarter by the damages group with $5.5 trillion and a growth of 19%. The second group to which premiums were issued the most was people with $3.1 trillion and an increase of 16%. The segments that did not move so much were occupational hazards and income.

This is also due to the fact that the damage insurance covers several mandatory insurances such as Soat. In fact, these categories represent the second group of insurance with the highest premiums issued with $772,000 million.

“Damage insurances are those that cover the affectations on the patrimonyon a vehicle, an earthquake, a hurricane, a civil work, any good that can be covered is given through damage insurance,” said Mario Cruz, former vice president of Fasecolda.

Auto insurance, which is not mandatory, ranked first with $1.4 trillion in written premiums and an increase of 39%, the loss ratio for this category of insurance was 63%, which means that for every $100 received in premium, $63 was paid.

This group is followed by fire and related insurance, for this segment they issued $805,000 million in premiums, with an increase of 17% and a claim rate of 27%.

Soat was the third insurance that had a higher cost of protection granted by the insurer for each policy issued, even so, these insurances decreased 10%, but the accident rate remained 115%; that is, for every $100 they received, $115 were paid.

“There are quite a few mandatory insurances, what people first look for is to satisfy these responsibilities, the insurance associated with credits, health, ARL, Soat and of those that are not mandatory, the one that is consumed the most is automobile”, said Alexandra Quiroga, president of AXA Colpatria.

On the other hand, in personal insurance, premiums are driven by group and group life insurance, Until March, at least $1.5 trillion was issued, with a growth of 19% compared to the same period in 2022. While the loss ratio for this segment is 34%.

Followed by this are health insurances that issued $754,000 million and had an increase of 17%, with a claim rate of 75%. Finally, there is the personal accident that achieved $444,000 million and an increase of 16%.

“In this group are those who have insurance that covers the effects on people: death, illness, unemployment. Some of them are mandatory, such as occupational risks that are a requirement when there is a labor contract, the pension insurance is taken by all the people who are in the individual regime with solidarity”, added Cruz.